You may have noticed I'm not a big fan of bank mortgage insurance!

I think that having insurance in place for your family is really important, and if you are going to to the trouble of putting insurance in place ideally you buy a plan that puts you in the driver's seat in terms of the premiums and coverage.

This is a very unselfish and potentially life changing purchase - you're buying it to make sure you and your loved ones are taken care of - so taking a little extra time to find out more is worth it.

#1: coverage should be guaranteed after your policy is approved and issued. This includes the amount you're covered for, the contract wording and premiums.

With a bank plan, you are part of a group contract and not an individual contract. Guess who is the owner and beneficiary of the group contract? The bank! Your bank coverage is not guaranteed, rates are not guaranteed, and yes, unfortunately, the contract wording can be changed by the lender without your approval. Please read the fine print because there may be exclusions such situations as for acts of war, terrorism or a pre-existing medical condition. 

With an individual plan, for as long as you continue to pay the premiums, your contract is guaranteed and cannot be changed by the insurer once it is approved and issued.

#2: you should be able to choose your own beneficiaries. With a bank life insurance plan, the bank is always the beneficiary. One of the great benefits of having an  individual policy is that you can select exaclty who you want the insurance proceeds to be paid to. These proceeds are paid directly and tax free to your beneficiary who can use the money as needed. That may not necessarily mean retiring the mortgage, as it could be more important to pay for time off work or to fly in family members.

#3: your coverage should be customized and portable.  Bank insurance is akin to one-size-fits-all clothing. The plans are the same for every customer and don't take into account the specifics of your life and situation.

With an individual plan, you can tailor the coverage to take into account items other than a mortgage, such as a student loan, university fund for your kids, or the fact that you are a business owner.

If you change lenders, your insurance should move with you uninterrupted. Individual insurance is totally portable and not impacted if you change jobs, change cities, or pay off or move your mortgage. With a bank plan, your coverage ends if you change lenders.

#4: critical illness insurance should be comprehensive. Some bank plans cover only three illnesses under their plans, and there may be pre-existing conditions clauses that you aren't aware of in the fine print.

With an individual CI plan, you can design your plan to include more than 20 conditions and even opt to get a return of premiums if no claims are made. Plus, your coverage and costs are guaranteed.

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We're often able to save our clients 30% compared to their current bank plan premiums. For a free rate comparison of your bank mortgage insurance and individual protection, please call us at 604.872.2866 or request a quote here.

Sincerely,

Rachel von Sturmer

One of the most common questions about life insurance we get is how to qualify for it. What is "evidence of insurability", what is a pre-existing condition, and what if I have been diagnosed with a major illness like cancer, a heart attack, or diabetes, or declined for insurance in the past?

It is not impossible to qualify for insurance even if you have been diagnosed with a serious illness. Insurers call a medical condition that has been diagnosed a "pre-existing condition". The rates may not be standard, but insurers may be able to offer coverage depending on the specific condition, how long ago you were diagnosed, and your current treatment and lifestyle.

True Benefits has recently been able to secure coverage for clients with past: skin cancer, Type 1 Diabetes, Gestational Diabetes, heart attack, and cancer. Other situations that we've been able to secure coverage for clients include: past drug or alcohol abuse, and dangerous sports or avocations such as scuba diving, heli-skiing, and racing cars. 

Every insurer asks for medical evidence with the application for insurance. The type of evidence will depend on several factors: the applicant's age, the amount of coverage applied for. To give you an idea of the range, a 25 year old applying for $200,000 of insurance may not be required to provide any medical evidence besides a health questionnaire, whereas a 60 year old applying for $2 million of coverage will need to see a nurse for blood and urine samples, a resting EKG, blood pressure, weight and height readings.

If you have been diagnosed with a medical condition, declined for insurance or offered non-standard rates in the past (also called a "rating" or "substandard rates"), insurers will also likely ask for an APS (Attending Physician Statement).

All of these items are paid for by the insurer, and True Benefits can arrange to have the lab results sent to your doctor so you can review them.

One of the best things to do if you suspect getting insurance may be a challenge is to ask your advisor to gather preliminary guidances for you. This is something we do for all of our clients.

A confidential description of your medical history, lifestyle, build, age and treatments is provided to the top Canadian underwriters (no names, birthdates or other identifying information should be provided to the carrier in a preliminary request). The insurer can then provide us with an estimate of potential rates, allowing the client to choose the most attractive insurer to apply with. It is best to do this before completing any applications.

A recent preliminary guidance for a client with a history of cancer showed that one carrier was able to offer standard rates, whereas the others indicated sub-standard ratings would likely be applied. The client applied to the insurer with the best offer and was able to obtain standard rates. The guidances allowed True Benefits to recommend the best underwriter, whereas if we had gone with the insurer offering the "cheapest" standard rates, the client may have ended up paying more than necessary.

Did you know that up to one third of applications for life and critical illness insurance are rated or declined? If you have any questions about applying for insurance, please feel free to call us at 604.872.2866 to discuss.